Steffy: Oil boom has raised safety, security risks

Firms must do more to ensure workers' safety while also securing land and property.

Updated 2:42 pm, Saturday, January 18, 2014

The Eagle Ford had more than a $60 billion impact on the South Texas economy in 2012, and more than 116,000 Eagle Ford jobs were supported in the multi-county area affected by the play.

The Eagle Ford had more than a $60 billion impact on the South Texas economy in 2012, and more than 116,000 Eagle Ford jobs were supported in the multi-county area affected by the play.

Photo: TooTH_PIK

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Pipes, part of the Eagle Ford Shale hydraulic fracturing energy industry, run by a broken windmill in Live Oak County, South Texas, on Thursday, Dec. 13, 2012.

Pipes, part of the Eagle Ford Shale hydraulic fracturing energy industry, run by a broken windmill in Live Oak County, South Texas, on Thursday, Dec. 13, 2012.

Photo: Billy Calzada, Staff

Steffy: Oil boom has raised safety, security risks

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A few weeks ago, Bill Blackwell turned off a stretch of road in South Texas and onto a property where crews are drilling five oil wells. Nobody stopped him. Blackwell isn't a threat. He owns the property, on which he has a second home. The drilling company, though, is supposed to maintain a guard at the entrance.

"Somebody could have driven right up to the house," he said. "If you have just an open area, people don't feel particularly constrained - there are no signs, nobody to keep them out."

In South Texas, in the rejuvenated Permian Basin of West Texas and in other drilling hot spots around the country, landowners are confronting a litany of safety and security concerns - many of which they didn't anticipate - as they allow hydraulic fracturing on their land.

The oil boom is bringing jobs and wealth to areas such as South Texas that for decades had little of either, but it also is eroding residents' sense of familiarity, and with it, a sense of security. Towns in which everyone knew everyone else are now seeing a boom in new hotels and restaurants overrun with strangers chasing high-paying jobs in the rejuvenated Oil Patch.

Like Blackwell, many landowners worry that contractors hired by the drilling companies aren't taking proper care of the land. The number of rig workers - strangers - on their properties overwhelms others.

Property owners aren't the only ones with concerns. Thanks to the oil boom, drilling companies are facing safety and security issues of their own.

In places like South Texas' Eagle Ford shale, any drilling in the past 50 years probably involved low-production "stripper" wells that required little monitoring. Because of hydraulic fracturing, oil companies have more at stake in each drilling project. A typical well in the Eagle Ford can cost as much as $7 million to $10 million, and because of the volume of oil produced, companies must do more to protect the value of their production than they did in the old days.

"You have a lot of expensive equipment out there and you don't want the potential for sabotage or destruction," said Charles Goslin, a senior operations adviser with Houston-based Butchko Security Solutions, which provides risk assessment and security for energy companies and other businesses. "The corporate oil and gas companies want to do the right thing, but when it gets out to the operations, these things run on the contractors. You've got a lot of the subcontractors, and you can't check it all out. They've got fairly low-paid security guards on the gates that sit out there by themselves on a trailer."

If access to well sites is poorly monitored, record-keeping often is worse. What security logs or other well-site data are maintained are often stored in files or notebooks, but these paper records are difficult to review or in some cases even find. Workers at the site often don't update them, and policies may not be followed closely in drilling areas with little supervision.

As the industry balances a drilling boom with a more skeptical public - and one that demands more safeguards - the need for better safety and security measures is growing.

Some of this is to be expected. Wildcatters and small independents led much of the initial charge to tap new reserves through hydraulic fracturing, and they tend to take more risks and adhere to fewer safety standards. Rising drilling activity attracted the attention of the larger companies, many of which are implementing stricter safety policies.

The boom, though, also is triggering a labor shortage, forcing oil companies to hire less experienced workers.

"When labor is scarce, you're getting more inexperienced people into potentially hazardous environment," said Stenning Schueppert, senior vice president of strategy and corporate development for Total Safety, a firm that consults on safety and training issues for oil companies.

In South Texas, the proximity to Mexico adds a new dimension to the concerns. The remote, scrubby plains provide cover for Mexican cartels smuggling drugs, humans and other contraband, Goslin said. Roads built to give drilling crews access to well sites also make it easier for smugglers to bring their wares into the country.

"The Eagle Ford Shale play has been very beneficial for Texas, and it's been beneficial for the cartels as well," Goslin said.

While the Eagle Ford's location near the border presents unique security challenges, the broader issues involving well-site security, contractor background checks and better monitoring of operations are cropping up as frequently as new wells in shale formations nationwide.

All of these issues are critical, yet safety and security protocols at many well sites remain lax compared with other parts of the energy business such as refineries or offshore rigs. As the domestic oil renaissance continues to grow, the industry must be more diligent in developing and implementing safety and security standards that are as stringent in places like the Eagle Ford as they are in other parts of the business.

Steffy, a former business columnist for the Houston Chronicle, is a contributor to Forbes and Texas Monthly who writes frequently on energy issues. He is the author of "Drowning in Oil: BP and the Reckless Pursuit of Profit," published in 2010 by McGraw-Hill.